WA business group backs Woolworths challenge to outdated trading rules

By Caitlyn Gribbin
Thu 10 Oct 2013, 9:12 PM AEDT

Woolworths is appealing to the West Australian Government to scrap what it calls redundant retail laws, including restricting the sale of underpants and nicotine patches to certain times of the day.

The WA Chamber of Commerce and Industry is backing the retail giant's move, saying the laws are bizarre and outdated.

John Nicolaou, the chamber's chief economist, says another example of redundant laws can be found at Woolworths-owned hardware stores.

"They can sell light bulbs, but they're not allowed to sell light fittings. They're allowed to sell outdoor lighting, but not indoor lighting," he said.

"They're just some examples of the anomalies that can occur when retail trading hours rules are only incrementally adjusted over time, depending on the circumstances of the day."

Last year, after much public debate about the benefits of Sunday trading, the WA Government voted to allow it.

A Woolworths petrol station can ... sell pantyhose after 9pm on Thursdays, but it's illegal to sell underpants at this time.

Woolworths

Now, the chamber has backed the submission by Woolworths to an inquiry into microeconomic reform in the state calling for a deregulation of trading hours and changes to some laws to benefit consumers.

The WA Economic Regulation Authority will consider the submissions and publish a paper that will further outline the topics considered for reform.

The Woolworths submission says that among the pointless restrictions is a curb on the hours of the day during which its petrol stations can sell certain goods.

The submission says:

"A Woolworths petrol station can sell film and flash bulbs on Sundays before 11am, but it's illegal to sell a memory card for a digital camera at this time; can sell cigarettes before 8am on Mondays, but it's illegal to sell nicotine patches at this time; can sell pantyhose after 9pm on Thursdays, but it's illegal to sell underpants at this time; can sell needles before 8am on Tuesdays, but it is illegal to sell wool at this time."

Mr Nicolaou agrees that relaxing trading hours is a significant microeconomic reform that would yield benefits for shoppers.

"Those that benefit from progressive deregulation of trading hours are consumers, because it's consumer preferences and taste which retailers need to respond to," he said.

"The problem in WA is the restrictions that are imposed on retailers limit their ability to be responsive to changing consumer preferences.

"It's high time that Western Australia modernised its retail trading hours laws to reflect a modern contemporary economy."

Small businesses 'could adapt'

Mr Nicolaou said small business owners also stood to benefit from more flexible trading rules, regardless of the need to compete with major players such as Woolworths.

"Ultimately, our philosophy around free enterprise is around providing choice for consumers and through increased levels of competition," he said.

"Competition is the perpetual spur that ensures that businesses are efficient and competitive, and provide the best available product or service for the market they're operating in.

"Those small businesses that are in competitive markets are the ones that have become most productive and most efficient over time because they've had to to survive."

He said although small businesses would face increased competition from a less-restrained Woolworths, they could "adapt their business model" in order to compete.

"Small businesses can flourish even amidst an environment that is competitive and does have a number of bigger players operating in their space," he said.

Motoring and leisure store owner Ray Della-Polina is among those who benefit from the current laws, but still says they must go.

"My view has always been that if you want to compete, you decide what you're going to sell and you get out there and compete," he said.

"If you're in small business and you need legislation to protect you so you can sell certain things that Woolworths and Bunnings or someone else can't now sell, they're not the lines that you should be in."

Mr Della-Polina concedes that other small business owners would argue they don't have the selling power of those major retailers.

"I do understand that, but it's a changing world and if you're going to be in business your business has to equip itself to meet whatever the demands of the environment are," he said.